Millennials’ Perceived Values towards Access

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MASTER’S THESIS

Millennials’ Perceived Values towards Access- Based Consumption Experiences in Denmark

An analysis of Swapfiets’ users from a Consumer Culture Theory Perspective

COPENHAGEN BUSINESS SCHOOL

MSc Brand and Communications Management AUTHOR

Silvia Jalón Baudet (123442) SUPERVISOR

Meike Janssen

DATE OF SUBMISSION 14/05/2020

NUMBER OF CHARACTERS 160.750

NUMBER OF PAGES 71

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Acknowledgement

I would like to thank everybody who contributed in some way to this work. First and foremost, I would like to thank my supervisor, Meike Janssen, for sharing her great knowledge, always be willing to help and giving good support and advices.

Furthermore, I would like to thank Lewis Bedford from Swapfiets, for providing me with valuable information regarding the company and its market. Also, I am grateful to Cathy Wigley for her moral support and the time she has spent proofreading this paper.

In addition, I would like to thank all the participants that, in a voluntary way, decided to take part in the interviews and provide me with precious information about their experiences as consumers.

Last but not least, I would like to thank my family and friends, for their continuous support, understanding and tolerance about the long hours I have spent writing this paper. Finally, I want to express my gratitude to Mirabay Romero for being the best study partner and calming me down when it was necessary.

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Executive Summary

The advent of the Sharing Economy and associated access-based consumption activities has been a key change in many Western countries’ economies over the last decade. This profound change in models of consumption has influenced the development of new business models like Product-Services-Systems (PSSs), exemplified by the Dutch bicycle leasing company Swapfiets. This paper has focused on the study of a specific segment of Swapfiets’ consumers: the Millennial generation, who show more familiarity with the Sharing Economy and have made access-based consumption activities part of their everyday lives.

Through this thesis, the author has aimed to get insights into the values that motivate and are extracted from access-based consumption by Millennials residing in Denmark.

Conclusively, this paper presents theoretical and practical implications which can be inferred from the research carried as part of this study.

The research question and sub-questions have been interrogated from a Consumer Culture Theory perspective by applying theories on self-identity construction and community feeling concerning the perceived values extracted by Millennials from access-based consumption and the use of PSSs. For that, a qualitative method has been followed where eight semi- structured in-depth interviews have been conducted. The data collected through the interviews has been analysed by applying an abductive approach in which theory and previous literature has been used in a deductive way alongside the exploration of new conceptual frameworks which characterise inductive methods.

Three main conclusions can be drawn from this analysis of the research. First, Millennials seem to base their decision to use PSSs on the functional and financial benefits they perceive they will get from choosing to use Swapfiets’ service. Second, once they experience access-based PSSs, there are hedonic and symbolic values extracted from the experience which help them develop their self-identity projects and feel part of the Danish cycling community. Third, those hedonic and symbolic meanings can boost Millennials’

empathy and openness towards future access-based consumption activities in other markets. Overall the demographic group studied were unconcerned about not owning a product; instead, they find other aspects of the experience, such as the service which comes

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together with accessing a product more important. Additionally, it is relevant to mention that these outcomes might vary depending on the type of product accessed.

The results of this study provide insights into the ways in which Millennials perceive access vs. owning and the ways in which they derive value from products without the necessity of ownership. Millennials have a markedly different understanding of and approach to what consumption means. They do not pay for a product; they pay for a service or an experience.

These insights may be applied by existing and future companies operating in the field of access-based consumption to gain insights into Millennial consumers.

Finally, this study is based on explorative research focused on Millennials living in Denmark and using the bicycle leasing company Swapfiets. Thus, there are some limitations in terms of generalizability and transferability as the findings might be different when applied to other fields and segments. Therefore, it would be interesting to do further research regarding other markets and generations.

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List of Figures

Fig. 1 – Thesis Structure……….12

Fig. 2 – Main categories and sub-categories of PSSs………22

Fig. 3 – How Swapfiets works………26

Fig. 4 – Research Onion………...…………..32

Fig. 5 – Conceptual Model based on the SCT………70

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1. Introduction

Climate change is one of the most significant challenges the world is currently facing, because without drastic intervention on a global scale, it represents a considerable threat to the whole of humanity. As people have become aware of the different risks the planet and the entire global population are exposed to, there has been a change in the way different societies are acting as people slowly move towards more sustainable behaviour and solutions (Sjåfjell, 2019). Many human activities cause damage to the environment, with transport causing particular pollution problems, as it is an activity that releases considerable amounts of greenhouse gases to the atmosphere (Eftestøl-Wilhermsson, 2019).

Consequentially, there is a global imperative to source and develop low-emissions mobility.

The moving of people and goods within cities has been termed “urban mobility” (Gabrielli et al., 2014). There exist significant costs associated with urban mobility that are not just carried by the citizens, who have to pay taxes, parking tickets, fuel etc. or by the governments, who are in charge of building proper infrastructure. Beside those costs, urban mobility can have significant impacts on society, health and environment – by fostering

“transport poverty”, local air pollution, greenhouse gas emissions, contaminations and so on.

Urban mobility represents more than 23% of Europe’s greenhouse gas emissions according to the European Environment Agency (EEA, 2019), who have set ambitious targets to reduce these emissions by two thirds by 2050. This is one of the reasons why many communities and institutions are moving towards more sustainable forms of urban mobility – for example encouraging walking, cycling or using public transport as cleaner, healthier and more socially equitable modes of transportation within the city (Golub, 2016). There is also an associated push to get citizens to reduce or avoid the use of individual motorised vehicles like cars (Gössling, 2013) to help achieve the reduction of green-house emissions (EEA, 2019).

By heavily promoting cycling as a desired form of urban mobility, Denmark, together with the Netherlands and Germany, has been one of the leading countries promoting the daily

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use of bikes within the city and pushing an associated reduction in car ownership (Pucher

& Buehler, 2008). According to The Cycling Embassy of Denmark (2016), 90% of Danish people own a bicycle; cycling accounts for 26% of all the trips shorter than 5 kilometres and 16% of the total number of trips. This data is interesting when compared to the use of cars;

while 9 out of 10 people own a bicycle, just 4 out of 10 people own a vehicle (See Appendix 1).

As a direct result of the move towards “greener” forms of transport, new forms of consumption and business models are emerging as a consequence of the different changes and challenges society is facing. “Product-Service Systems” (PSSs) are a new form of business model which have been developed to minimise environmental impact by providing consumers with the use of services instead of or in addition to owning products. As consumers reimagine and renegotiate the meaning of ownership, an increasing number of companies are adding value to their products through the provision of services, customisation of goods or continuous innovation, instead of focusing on the product itself and the production of significant amounts of standardised goods (Mont, 2002). Some of the trends related to this system are: the use of the product as a service instead of the sale of the product itself; the increase of leasing instead of buying; and the rise of repair, re-use and recycle instead of throwing-away concepts (Mont, 2002). These trends have also been reflected in the bicycle market in Denmark, where an increasing number of people have decided to access a bike instead of owning one.

Product and service innovation in Europe’s bicycle market is changing the way consumers access bicycles. Some companies are creating new forms of business models in which customers do not need to acquire their bikes by purchasing them. Swapfiets is a prime example of this shift. The central business concept is based on offering a product (bicycle) with complementary services like reparation, exchange if necessary or access to a new bike in case of theft. The company runs a subscription model with customers paying a monthly fee to have use of their own bike, and the opportunity to get them fixed or swapped any time they need (Bedford, 2020).

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Swapfiets began its business repairing old bikes and offering them to consumers. Over time, its business model gradually evolved, ending up as one of many new hybrid companies offering both product and service: they now design and produce their own bikes as well as providing a maintenance service for them. The company was founded in the Netherlands and gradually expanded into Germany, Belgium and finally Denmark, where it has grown exponentially since then (Bedford, 2020).

Most of the research on PSS business models has focused on environmental and economic benefits; however, there is a gap in current research on PSSs and the way consumers perceive, give and extract value from consumption. These perceptions of value are influenced by the different options consumers have and the socio-cultural context surrounding them. The relation between the socio-cultural environment and the consumer was studied by Arnould and Thompson (2005) who developed what they called Consumer Culture Theory (CCT). They defined Consumer Culture as “a social arrangement in which relations between lived culture and social resources, and between meaningful ways of life and the symbolic and material resources on which they depend, are mediated through markets” (p: 869). Globalisation, market capitalism and the advent of a digitally interconnected world mean cultures overlap and intersect. CCT offers a broad and complicated framework to understand consumers’ behaviour within a culture-specific context, allowing for the intersection of different influences. Consumers are no longer assumed to be homogeneous within different societies or demographics. Social heterogeneity means values, meanings, ways of living and consuming are not necessarily shared by everybody within the same culture (Arnould & Thompson, 2018).

In the current study, there is a focus on two of the main dimensions of CCT, namely the construction of self-identity and the way consumers create a feeling of community with others through their consumption experiences (Arnould & Thompson, 2018). These consumers belonged to a specific generation of Millennials (between 20 and 30 years old) and were at the time of the study living in Denmark.

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1.1. Research question

The main objective of this paper is to interrogate how consumption has changed and its relation to consumers’ construction of self-identity and community feelings. It will, specifically, focus on the bicycle market in Denmark where an increasing number of people are leasing bikes instead of owning them. The main target of the study is Millennial, a generation that shows a certain tendency towards experiencing and accessing products rather than owning them. The values they perceive and how they are used to create their identities and feel part of a community are the main aspects under study in this paper. That brings us to develop the following research question, which is also divided into two sub- questions:

From a CCT perspective, what are the different perceived values extracted by Millennials from access-based consumption experiences?

- What are the roles of the different perceived values in the consumers´ self-identity construction projects?

- What are the roles of the different perceived values in the consumers´ feeling of community?

1.2. Delimitations

The aim of this study is to get an insight into the relationship between self-identity and community construction which comes from the experience of leasing a product. This will be compared to the experience of owning, sharing and renting the same and other products.

There are some facts and delimitations that need to be mentioned and explained in this chapter to get a better understanding of how the results of this research can or cannot be used.

Firstly, this research focuses specifically on the PSS business model of Swapfiets, which is a bicycle leasing company. Therefore, it can be difficult to extrapolate the results to the wider

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markets or sectors. Nonetheless, some outcomes related to other markets and industries have been found through the process, and the interviews included questions regarding that topic that show how people feel about using the same or similar systems in other sectors.

Secondly, this paper focuses on people based in Denmark’s capital city Copenhagen, who are aged between 20 and 30 years old. The findings from this study cannot therefore be automatically applied to other age groups or demographics. In addition to the above points, much of the research for this paper occurred during the 2020 lockdown as a result of the Covid-19 pandemic. This inevitably impacted on data collection and made it more challenging. The recruitment of participants and the interview process have been complicated as people were asked to stay at home and most of the institutions and business were closed. Therefore, probably in normal circumstances, the process would have been more comfortable and faster, and there would have been more chances to connect with a wider range of participants.

Thirdly, this research aims to make a comparison between owning, renting and leasing.

Nonetheless, it has only collected data about those who were leasing a bike at that time. To get insights of how customers feel about other ways of consumption, they were given some premises and scenarios about owning, sharing or renting where they were asked about which options they would choose and based on which aspects.

Conclusively, it should be mentioned that this is an explorative research and there are some limitations on generalizability and transferability. Therefore, findings are used to provide inputs for future research or managerial implications in the context and field under study.

1.3. Terminology

Below I propose simple definitions of some of the commonly used terms mentioned throughout this paper in order to clarify meaning and minimise confusion.

Sharing Economy: A concept evolving from “sharing” in which objects or products are not just exchanged based on social reciprocity and altruistic behaviour. Instead, there is a monetary profit expected from it. A Sharing Economy arises with those new market

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exchange combinations, commons-based sharing and capitalist profit-seeking (Arvidsson, 2019).

Access-based consumption: Characterised by market transactions which occur despite the fact that there is no transfer of ownership. Through the present study, the different dimensions of the access-based consumption proposed by Bardhi and Eckhardt (2012) have been mentioned: temporality, anonymity, market mediation, consumer involvement, type of accessed object and political consumerism.

Product-Service-Systems (PSSs): Defined by Mont (2002) as “a system of products, services, supporting networks and infrastructure that is designed to be: competitive, satisfy customer needs and have a lower environmental impact than traditional business models”

(p: 239). There are eight different types of PSSs proposed by Tukker (2004), but this study will put particular emphasis on two of them: leasing and renting/sharing.

Leasing: A type of PSS in which the provider keeps the ownership of the product and is often responsible for its maintenance, repair and control. At the same time, the lessee has unlimited and individual access to it by paying a regular fee (Tukker, 2004). This study identifies Swapfiets as a bike leasing company; therefore, this term is used when the researcher refers to the use of Swapfiets. Nonetheless, the maintenance and repair of the bicycles in the case of Swapfiets are carried by the company and not by the users, so it is important to keep in mind that difference between the official definition and the way the concept leasing is used in this paper.

Renting/Sharing: This type of PSS is similar to leasing, with the main difference that consumers have limited access to the product, which can be sequentially used by other people (Tukker, 2004). In this study, renting is associated with Donkey Republic, which is a big competitor of Swapfiets with the difference that the bikes are public (can be used by other customers) and the consumers do not have longitudinal access to the product.

Ownership: This is related to the concept of possession of objects, which was related by Belk (1988) with the creation of consumers´ identities. This concept is continuously

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compared through this paper to leasing and renting. Additionally, it is sometimes used in association with “purchasing” or “buying”, in which it is assumed that people get the ownership of the product. On the other hand, the terms “sense of ownership” or “perceived ownership” are used in relation to how consumers feel about the products they have access to by leasing or renting them.

1.4. Thesis Outline

The outline of this thesis is shown in the following figure:

Fig. 1 - Thesis Structure¹

1 Self- created Outline

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As Figure 1 shows, this paper has been divided into seven sections. The first section consists of an introduction of the topic under research as well as the formulation of the research questions. In the second and third chapters, there is a review of the existing literature relevant for this study as well an introduction to the Consumer Culture Theory that shed light to this study. Thereafter, there is an introduction about the chosen methodology as well as an explanation of the data collection tools, recruitment of participants and analysis methods used for the research.

In the fifth section, the findings of the analysis are shown divided into five parts: 1) Functional Values; 2) Financial Values; 3) Hedonic Values; 4) Symbolic Values; and 5) Comparison with other accessed products. After that, the Discussion part is based on a summary of results and their relation to the previous literature and theory. Finally, there is a proposal of potential managerial implications for organisations as well as possible further research in Section 7.

2. Literature Review

This section provides insights from previous discussions and literature regarding the topic of this study. First, I introduce the literature regarding the Sharing Economy, which is considered the primary base in which access-based consumption and PSSs business models are rooted. After that, the paper provides an overview of existing literature concerning the different perceived values people extract from consumption.

2.1. Sharing, Pseudo-Sharing and Sharing Economy.

“Sharing is the allocation of economic goods and services without calculating returns, within an intimate social group, and patterned by the general role structure of that group. It is an economic behaviour with a heavily weighted social dimension.” (Price, 1975; p:5)

Price (1975) defined sharing as a primary economic behaviour that has existed for hundred thousands of years. However, this concept has evolved through time, generating different

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exchange (Akbar, 2019). Thus, Belk (2014) argued that this practice should be called

“pseudo-sharing”, as there are profit motives and an expectation of reciprocity rather than community feelings related to an everyday lifeworld or the reproduction of social relations.

Through this paper, I use the term “sharing”, rather than “pseudo-sharing”, when referring to “sharing economy”.

Benkler (2006) argued that sharing has become a vital feature of the new communities;

however, some authors agree that this contemporary “sharing economy” has lost the essence of what sharing means, and, as it has been mentioned before, the main motive of doing it is based on profit-seeking. The feeling of community might be no longer present as there exists a clear expectation for reciprocity in sharing (Belk, 2014). Alternatively, authors like Parigi and Cook (2015) argued that some sharing networks like Couchsurfing or Airbnb rely on digital mediated reputation and reinforce interpersonal trust. In those cases, the collaboration is not seen just as a way of sharing but also as a form of accumulating transferable social capital as a mean of reputation (Arvidsson et al. 2016). In conclusion, the

“sharing economy” arises with those new market exchange combinations, commons-based sharing and capitalist profit-seeking (Arvidsson, 2019).

Belk (2007) defined sharing as an alternative to owning, in which people together enjoy the benefits or costs of products. In that way, what it used to be “mine” or “yours” now becomes

“ours”. Furthermore, this sharing can go from a tangible product – like a car or a house – to non-tangible things – like knowledge or responsibility. Materialism in combination with the conviction that self-identity is developed by possessing things might inhibit sharing as a practice (Belk, 2007). Nevertheless, some authors (Iglehart, 1981; Pine & Gilmore, 1999) have argued that we are in a post-materialism era, and people are starting to value “doing”

over “having”. Consequently, businesses are following the path towards the decrease of ownership and materialism (Belk, 2007).

As it has been mentioned before, different reasons motivate people to participate in the Sharing Economy. In the following, some of the existing literature related to that topic is presented.

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2.2. Literature on Access-Based Consumption

Bardhi and Eckhardt (2012) defined access-based consumption as those transactions that can be market mediated without implying a complete transfer of ownership from the company to consumers. They argued that new networks and alternatives to purchasing are emerging, leaving behind the concept of ownership.

According to Bardhi and Eckhardt (2012), consumers perceive value on “accessing”

products without necessarily owning them. They are willing to pay for the experience of getting access to something temporarily. Through access-based consumption, people can use and enjoy products or networks that, for example, they could not afford to buy (Bardhi

& Eckhardt, 2012). That might be the reason why access-based consumption has been historically stigmatised and considered a waste of money as it limits consumers’ property rights over the products as well as signaling lower financial power and status (Durgee and O´Conner, 1995). However, over the last decade, there has been a proliferation of this type of consumption, in which market mediated access to products has become an important phenomenon, and companies are starting to find new ways to monetise it, utilizing the latest technologies in order to do so (Bardhi & Eckhardt, 2012).

In the following, there will be an introduction to different research into access-based consumption compared to traditional consumption and ownership.

Chen (2009) studied art consumption behaviour from two different perspectives: possession (collection) and access (exhibit visits) to a product (artwork). She proposed that consumers can have different types of relationships with the object and “experiencing” them can reduce the necessity of possession. Her research was based on in-depth interviews conducted with 116 participants who were “collectors” (people who owned pieces of artwork and never resold them), and “visitors” (people who visited art exhibits but never purchased artwork).

By comparing collecting versus experiencing, she found that the type of consuming is underlined by different consumer desires and helps to shape their perception of values. She concluded that the value of possessions is not the only initiator of the extended self- construction; instead, people can provide that value to the extended self through

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experiences which develop memory formation and enrich each individual’s human experience (Chen, 2009).

Bardhi and Eckhardt (2012) noted that there was a lack of literature about “what the nature of consumption under conditions of sharing looked like” (p: 881) and so decided to extend their knowledge of access through the study of car sharing. In their article, they argued that access-based consumption is a unique form of consumption. However, there was still a lack of understanding of its features and complexities. Using their specific case study of car- sharing, they explored different consumer-product, consumer-consumer and consumer- marketer relationships taking into account the socio environment (Bardhi & Eckhardt, 2012) One of the main differences between possession and access in terms of consumer-product relations is based on the fact that, in ownership, consumers have total property rights. That means that they can deny access to others, sell, modify, and profit from their goods etc.

Additionally, with ownership, the relationship between consumers and the product they own is clear as well as the boundaries with other consumers. However, in access-based consumption, these relations can become blurry (Bardhi & Eckhardt, 2012).

Access-based consumption can be similar to the term “sharing”; however, they differ in the perceived sense of ownership. That means by accessing a product, there is no transfer or joint of property; instead, the consumer gets access to something in a non-altruistic way (Bardhi & Eckhardt, 2012). Through the current study, access-based consumption has been considered a concept framed within the Sharing Economy.

Bardhi and Eckhardt (2012) studied access-based consumption from six different dimensions: temporality; anonymity; market mediation; consumer involvement; type of accessed object, and political consumerism. In their research about Zipcar, they found that, generally, consumers do not experience perceived ownership or identification with the product accessed. They argued that car-sharing is considered a market exchange where self-interest and utilitarianism play the central role. Furthermore, they demonstrated that consumers usually engage in opportunistic behaviours with the company and the other customers and look out for their own interest at the expense of the object they are using.

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Finally, they also found that consumers did not engage in community building and did not feel any identity connection with the company apart from the market exchange. That means that, for Zipcar customers, the main motivations to engage with car-sharing were primarily utilitarian (Bardhi & Eckhardt, 2012).

2.1.1. Access-Based Consumption Dimensions

After exposing the reasons why Access-Based Consumption works in different markets and how consumers perceive it, it is interesting to mention how the different types of access can be distinguished from one another. Bardhi and Eckhardt (2012) proposed six different dimensions, where various types of access can be situated along:

Temporality. Consumption happens to be more temporary in access, rather than the long- term interplay that characterises ownership (Chen, 2009). Within this dimension, the access consumptionscapes can vary in two different ways. On the one hand, an object can be short term or have longitudinal duration, which means that the access to the product can happen as a one-time transition – short term – or it can be based, for example on a membership which has a different longitudinal duration. Conversely, the length of the object’s usage can vary from long-term use, for instance, by leasing something consumer is going to use for one year, to extremely limited use like in hourly usage models (Chen, 2009).

Depending on this dimension, there are implications for both object-consumer and consumer-consumer relationships. One example is the sense of ownership the consumers develop during long-term usage. As consumers have more time with the object, appropriation practices and behaviours emerge, for example, as consumers get to know and enjoy controlling or investing themselves in the object (Belk, 1988).

Anonymity. This cluster is related to the relationship and the behaviour between consumers. Anonymity can be manifested in two different ways: interpersonal or spatial.

Interpersonal manifestation relates to the extent to which the access of a product is public, happening in a social context and consumers share with others; or private, when the consumer gets exclusive access, and there are clear boundaries between him/her and the

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others. In such cases, social connections play an important role as consumers might show clear signs of caring for the others and the shared products they mutually access (Bardhi &

Eckhardt, 2012).

Spatial manifestation relates to the proximity between the product accessed and the consumer. Access can be motivated by convenience when the product is, for example, near consumer’s home or can be accessed by getting to a store or a hub which is a less intimate context and therefore, consumers might experience less of a sense of ownership (Bardhi &

Eckhardt, 2012).

Market Mediation. This dimension varies from for-profit to not-for-profit. This last one is mainly characterised by the fact that the access happens in a public sphere, for example, between people who exchange and share in an altruistic way. On the other hand, for-profit access-based consumption is mediated by the market, and there is a search for economic benefits. Depending on the level of market mediation, the relationships between consumers and products, and the exchange rules can vary (Bardhi & Eckhardt, 2012).

Consumer Involvement. In this case, the level on which consumer is involved in the process of accessing the product can vary from limited (e.g. full-service provided by the company) to extensive (e.g. self-service). In the last one, the consumer might be involved in the process of co-creation, a fact that has some implications on consumer’s commitment or identification with the product accessed (Bardhi & Eckhardt, 2012).

Type of Accessed Object. The nature of the object accessed might vary depending on two distinctions: if the product is experiential or functional; and material or digital. On the one hand, accessing an art museum would be experiential (Chen, 2009), while renting a car would be functional. On the other hand, leasing a CD would be material while using online music platforms would be digital. The sense of ownership consumers experience might vary depending on the category of the product as well as their willingness to share it with other people (Bardhi & Eckhardt, 2012).

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Political Consumerism. This dimension is related to ways in which consumers choose one way of consumption or another based on their personal ideology and how that way of consumption becomes a political tool for them. An example of that is seen in the intersection of consumers’ environmental concerns and the resulting ways they decide to access a product or service rather than buying it outright as a way of saving resources. In that way, the political aspect of accessing a product or a service might be related to how consumers identify themselves and show it to others (Bardhi & Eckhardt, 2012).

2.3. Product-Service-Systems

As economic and social changes bring about the “dematerialisation” of the economy,

“product-service-systems” (PSSs) have emerged as a way of fulfiling consumers’ needs through the provision of more dematerialised services, often associated with a change in the ownership structure (Mont, 2002). PSS has been defined as “a system of products, services, supporting networks and infrastructure that is designed to be competitive, satisfy customer needs and have a lower environmental impact than traditional business models”

(p: 239).

As part of a gradual cultural shift towards different business models and changing patterns of consumption, an increasing number of companies are embracing the PSS business model to add value to their products. From both consumers and producers’ perspectives, PSSs signal changing consumer attitudes towards property rights, as they are focused on the product use instead of its ownership (Mont, 2002). Using the six dimensions Bardhi and Eckhardt (2012) proposed, Catulli, Cook and Potter (2017) studied the use of infant car seats, provided via PSS by a car seat manufacturer. The car seats were promoted to parents and carers by National Childbirth Trust (NCT), in which the consumers got to use the infant car seats for six months without owning it.

The reasons why Catulli et al. (2017) decided to research that field were based on two factors. Firstly, the seats were usually discarded before they were unserviceable and secondly, it was challenging to resell them due to safety fears. They collected data via 26

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semi-structured interviews, then they analysed and identified five primary outcomes following the six dimensions of access-based consumption referred to above.

In contrast to Bardhi and Eckhardt (2012), Catulli et al. (2017) found that there was a partial identification of consumers with the PSS, in which there is a lack of appropriation of the product. However, users identified with the PSS through which the seats were provided. The subsequent analysis also revealed a complex interplay of both functional and symbolic value in the PSS consumption. Consumers were seeking not just functional value, but also some symbolic benefits related to safety, health, parental pride, etc. In terms of brand assurance and product quality, Catulli et al. (2017) found that consumers look for quality assurance from both the PSS company and the NCT. The non-profit status of NCT was essential to establish credibility about the company. Additionally, consumers placed quality assurance on the service elements – like customer service, information or guidance, insurance, etc.

In their 2012 study into Zipcar, Bardhi and Eckhardt found that consumers did not want to be associated directly with the brand (Bardhi & Eckhardt, 2012). In contrast, Catulli et al.

(2017) argued that users of baby care products see themselves as members of a community. Moreover, participants did not want to be anonymous; instead, they wanted to share their experiences with other people in their same circumstances – meaning the shared communal experience of being new parents became a defining part of scheme’s users wider emotional relationship to the product and experience of use, with the scheme speaking to people’s personal emotional experiences as well as their values.

Finally, in terms of risk and trust, the participants of Catulli et al.’s study (2017) argued that PSS helped them manage the risk of buying inappropriate baby products, as they could test the seats for size and functionality before having to commit to using them. The participants showed a lack of trust in the baby-care market, and the authors extrapolated that there could be a rise of political consumerism since the scheme’s users could use PSS as a viable alternative to the baby care products they might otherwise feel coerced to buy. Suddenly the rental option was a real alternative to for-profit markets as a reputable and well-known non-profit started challenging traditional companies and offering a different business model which appealed on a practical and emotional level to consumers (Catulli et al., 2017).

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Roy et al. (2009) studied the acceptance of PSS from a consumer perspective. They argued that most of the research about PSS was made from environmental or commercial perspectives, exploring the potential of the Business-to-Consumer market. However, there was a gap in the study of how PSS would be beneficial for consumers. They developed a study in which participants, through semi-structured in-depth interviews and focus groups, were presented with hypothetical PSS offers. The results of the study suggested that, in contrast to the importance of property for consumers that other researches had previously found, participants emphasised the activities associated with accessing something, rather than owning it. Furthermore, they discovered a lack of trust in the hypothetical PSSs suggested in the study. They seemed sceptical about the contents of certain offers, due to the association with previous experiences like “package-deals”. Consequently, they also showed that it was vital for them to have references from their families, friends and media when considering those offers.

2.3.1. Types of Product-Service-Systems

Tukker (2004) proposed a classification of PSS business models based on distinctions made between three categories: product-oriented services, use-oriented services and result oriented services. He also divided those three categories into eight different sub-categories:

(1) product related, (2) advice and consultancy, (3) product lease, (4) product renting/sharing, (5) product pooling, (6) activity management, (7) pay per service unit, and (8) functional result.

In the first category, product-oriented services, the business models still mainly attempt to sell a product but add extra services or benefits to it. The value in this category is put onto product content and its tangible benefits (Tukker, 2004).

On the other hand, use-oriented services still place importance on a product but selling it does not play the central role; instead, the ownership reminds with the provider who makes the product available to the consumer in different ways. In these models, there is a balance

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between the tangible and intangible benefits provided and a mix between the service and product contents (Tukker, 2004).

Finally, when there is not a central product involved but an agreement on a particular result from both provider and client, that is a result-oriented service business model. This model is purely based on the provision and consumption of a service and places all the added value on the intangible benefits (Tukker, 2004).

Fig. 2 – Main categories and sub-categories of PSSs.2

According to Tukker (2004), product-oriented services encompass product-related as well as advice and consultancy services while result-oriented services incorporate activity management, pay per service unit and functional result services. Focusing on use-oriented services, Tukker (2004) suggested three different sub-categories, which are product lease, product renting or sharing and product pooling. The main differences between the three of

2 Tukker (2004)

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them are in the type of access, limited/unlimited or individual/collective which customers have to the product.

The current study pays special attention to the product lease and product renting/sharing as business models. In the first case, the provider keeps the ownership of the product and is often responsible for its maintenance, repair and control. At the same time, the lessee has unlimited and individual access to it by paying a regular fee. In the second case, the product is also owned by the provider, who is responsible for the maintenance, control and repair, with the main difference that consumers have limited access to the product, which can be sequentially used by other people (Tukker, 2004).

2.4. Perceived values

Consumers extract different values from the products, services or brands they use. To put this in context, I will discuss the literature regarding the different values obtained from consumption experiences as well as an introduction on how they have evolved through time.

According to Holbrook (1999), products and services are related in the sense that the offering of products can be seen as performing a service in the process of conferring customer value. In addition to that, Helkkula et al. (2012) stated that “within the contemporary discourse around service-dominant logic, phenomenologically (experientially) determined value has been placed at the centre of value discussion” (p.59). That can be translated into the fact that, in the marketplace, both products and services are complementary. Hence, intangible values are added to tangible products as well as tangible values are added to (intangible) services (Nilson, 1992).

Those facts imply that there is a need for more research on the service-value relationship.

Several authors have explored the concept, components and relationship between the different types of value (Holbrook, 1994, 1999; Holbrook & Corfman, 1985; Lin et al., 2005;

Gallarza & Gil-Saura, 2008; Sánchez-Fernández et al., 2009). They started from the underlying conceptualisation of value as a balance between benefits and costs (e.g. Cronin et al., 2000; Lin et al., 2005). However, that was questioned by later authors who believed

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this two-dimensional perspective of values does not include further aspects that might be intrinsic to the benefits or costs perceived by consumers (Oliver, 1999).

Later authors consequently argued for a more fluid and interchangeable understanding of the concept, in which values were perceived as “dynamic, interactive, non-linear, and often unconscious processes” (Payne et al., 2008, p. 86). Finally, a later approach started considering the experiential perspective on value by not only focusing on the utilitarian, and more objective meanings of consumption, but also on the hedonic, symbolic, and more subjective aspects of consumption (Holbrook & Hirschman, 1982; Holbrook & Corfman, 1985). This experiential approach is no longer considered new since the dual concept

“utilitarian/hedonic” has been of interest for academics for a few decades now (Gallarza et al., 2017). That might be a consequence of the fact that the line between products and services has become somewhat blurry, and new ways of offering and consuming have been born.

The utilitarian value (which might also be termed “functional value”) involves the objective benefits of the consumption experience, usually related to the efficiency, complexities or irritations in the process of reaching the consumption goal. On the other hand, the less rational hedonic value is related to the multi-sensory and emotional meanings of consumption (Hwang & Griffiths, 2017).

In their study about Millennials and collaborative consumption, Hwang and Griffiths (2017) argued that there are three main types of values relevant to this segment of consumers and their decision to use collaborative services: utilitarian, hedonic and symbolic.

In terms of economic and utilitarian values, collaborative consumption provides consumers with cost-saving and practical benefits that are one of the critical elements motivating willingness and feelings of satisfaction towards the sharing economy (Möhlmann, 2015).

However, those services also involve the offer of new experience and entertainment, so the economic savings are offered alongside other tangible benefits to the consumer. Those aspects are related with the hedonic value of the service, which is at the same time connected with some positive social interaction between consumers engaging in the

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practice of consumption (Hwang & Griffiths, 2017). Finally, the symbolic value of consumption is linked to the positive outcome of consumers´ behaviour and their awareness about the importance of sustainability and other topical social issues like climate change, ethical sourcing, and transparent corporate social responsibility.

According to Hirschman & Holbrook (1982), the hedonic part of consumption is “related to the multi-sensory, fantasy and emotive aspects of product usage experience”. In contrast to the functional and financial aspects of consumption, the hedonic value is considered to be more subjective and be related with entertainments: the “fun” and “playful” part of consumption (Babin, Darden & Griffin, 1994). Therefore, the perceived hedonic value of consumption is not related to maximising utility or tangible product benefits. Instead, it is associated with satisfying emotional wants (Hirschman & Holbrook, 1982).

Some authors (Ditcher, 1960; Maslow, 1968) have argued that hedonic desires can dominate the utilitarian motives when people make choices in consumption. However, previous research on consumer behaviour has neglected the study of hedonic responses associated with consumption and didn’t consider the sensory aspects of the consumption experience like aesthetics, enjoyment, pleasure, feelings arising from use, etc. (Holbrook &

Hirschman, 1982).

For the present study, I have considered four central perceived values extracted from consumption: functional, financial, hedonic and symbolic, based on the division Hwang and Griffiths (2017) used in their study. It is critical to emphasise that functional and financial value are exposed as separated aspects in the present study. Furthermore, symbolic value is considered individually, even though many authors (Holbrook & Hirschman, 1982;

Chandon et al., 2000) have recognised it as a part or sub-aspect of the hedonic value.

2.5. Case: Swapfiets

The company Swapfiets was founded by a group of friends in 2014 in the Netherlands, and now operates in 49 cities in four different countries: the Netherlands, Belgium, Germany and Denmark (Swapfiets.dk, n.d.). The company is based on a subscription model that offers

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bicycles together with maintenance service that makes sure the customers have their bikes repaired or replaced with a new one within 24 hours should problems arise.

In order to get started using Swapfiets, customers need to sign up through an app or webpage and decide where they want their bike delivered. After that, they can start using it and contact the company through an app, phone or e-mail if there is any problem with their bike. If there is a problem, the company fix or swap the bike for another working one in less than 24 hours (See Figure 3).

Fig. 3 - How Swapfiets works³

The bicycles Swapfiets offers can be recognised by the blue front tire and the logo of the company. They offer three types of bikes - “Original”, “Deluxe 7”, and the “Power 7”- which go from a bike with more basic features to an e-bike. However, the e-bike is still not available in Denmark. The company started as a Business-to-Consumer model but has started to expand into Business-to-Business territory by offering their services to companies´

employees and hotels (Bedford, 2020).

Swapfiets is based on a use-oriented PSS which offers a bike together with repairing or swapping service. Based on the types of PSSs proposed by Tulkker (2004), Swapfiets is considered a leasing model in which the consumers have unlimited and individual access to a bike without owning it, and it is the company who is in charge of its maintenance.

To get a better understanding about how consumers perceive access-based consumption, the participants have been asked about one of the other types of PSS proposed by Tukker

3 Extracted from Swapfiets.dk webpage (2020)

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(2004), renting/sharing, as well as a traditional form of consumption based on ownership.

Donkey Republic has been included in the study as an example of a renting/sharing business model. This differs from Swapfiets in the type of access offered to consumers, as it is unlimited and shared with other customers. Participants were also questioned about the option of purchasing a bike – the traditional consumption model which brings exclusive ownership and total responsibility for maintenance.

3. Theoretical Foundation: Consumer Culture Theory

The Consumer Culture Theory (CCT) is used in this paper to provide insights into the adoption of PSS by consumers. From the late 70s onwards, various researchers (Belk, 1975) have discussed the need for new perspectives on Consumer Behaviour research (Joy

& Li, 2012) that take into account the cultural and social complexities of consumption (Graeber et al. 2011).

Arnould and Thompson introduced the concept of Consumer Culture Theory (CCT) in 2005, defined as a multidisciplinary approach to enable the study of the “dynamic relationship between consumers actions, the marketplace and cultural meanings” (Arnould & Thompson, 2005; p: 868). CCT focuses on the contextual, symbolic and experiential aspects of consumption, breaking the cycle of consumption down into different aspects including acquisition, consumption itself, possession and disposition processes. These phenomena were then analysed using macro-, meso- and micro-theoretical perspectives (McCracken, 1986).

Arnould and Thompson (2005) studied the relationship between socio-cultural environment and the consumer and defined Consumer Culture as “a social arrangement in which relations between lived culture and social resources, and between meaningful ways of life and the symbolic and material resources on which they depend, are mediated through markets” (p:869). Consumer culture is affected by the interplay of different cultures intersecting in a globalised world driven by market capitalism. This theoretical framework provides a broad and complex way of interrogating consumers’ behaviour, with the

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Arnould and Thomson’s (2005) stated that CCT research is based on four interrelated theoretical dimensions: (1) Consumer Identity Projects; (2) Marketplace Cultures; (3) Socio- Historic Pattering of Consumption; and (4) Mass-Mediated Marketplace Ideologies and Consumers’ Interpretive Strategies.

The first cluster, Consumer Identity Projects, interpret CCT informed by cultural studies about identity and the negotiation of cultural contradictions through the marketplace along with the commodification of cultural rituals and emotions. After that, CCT added the use of marketplace resources to the initial focus on consumer experiences and their practices of identity construction. That is based on how socio-cultural structuration affect is affected by individual and collective consumption practices and identity projects (Arnould & Thompson 2018). The interest in exploring the previously mentioned relations generated the three other strands mentioned below.

The second cluster, Marketplace Culture, explores anthropological studies on culture and how institutional forms of social and familiar solidarity are created by consumers’ rituals and practices. The third cluster, Socio-Historic Patterning of Consumption, focuses on sociological and historical research and how class, gender, age and ethnicity affect and are affected by marketplace behaviour. In the final cluster, Mass-Mediated Marketplace Ideologies and Consumers’ Interpretive Strategies, the emphasis is on how consumers create and reconstruct mass media and advertising in ways that often differ from the corporate encoded meanings (Arnould & Thompson 2018). Work in this area focuses on how consumers reach identity goals through practical and narrative dialogue with the cultural frames imposed by dominants commercial ideologies. Consumer Identity Projects and Marketplace Cultures as domains of Consumer Culture Theory will be explored further in the following section.

3.1. Consumer Identity Project and the Marketplace.

Identity is a complex phenomenon which encompasses: (1) personality, the set of features that comprise a given person’s character, which is thought to be relatively stable and scaffolded by genetically determined traits; (2) self-concept, a collection of beliefs one has

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about one’s self; (3) identity project, the strategic configuration of objects, symbols, scripts, and practices to claim particular identity position; and (4) self-presentation, the performance of an identity project within a social context (Arnould & Thomson, 2018; p. 38).

Identity is not created accidentally. Rather it is created by intentions and guided by a purpose. Consumers usually have different identity projects that generally evolve and change through time and depend on the context and the multiple social roles they have.

These social roles are groups of behaviours, rights, obligations, beliefs and norms. At the same time, they are also simultaneously and cyclically enacted. The social context or circumstances around people are the ones determining which social roles are dominant.

(Arnould & Thompson, 2018).

People’s identities do not stop evolving through time, as they continuously create “self- narratives” that tell their unique story and are based on an on-going process that changes by adapting to the perceptions of the past, present and future. Additionally, there is an essential role of the market in the identity construction processes, since it is the market which sometimes supports or even enables them by providing its offers (Arnould &

Thompson 2018). To sum up, Arnould and Thomson (2018) argued that people use consumption to perform their identities, which I will now examine in greater depth in the following chapter.

3.1.2. Self-Extension, Ownership and Access.

As it has been mentioned before, the market plays a crucial role in the identity construction process. Furthermore, consumption seems to be central to the identity expression and people consume to perform their identities, both individual and collective (Arnould &

Thomson, 2018).

Belk was the first researcher to explore the relation of commercial goods with consumers’

identity construction processes (Belk 1988). Belk argued in 1988 that “our possessions are major contributors to our identities” (p:139), as people unintentionally see those possessions as parts of themselves. He introduced the concept of “self-extension”, in which having, doing

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and being play significant roles. Self-extension happens individually and collectively through consumers´ control, creation, knowledge, contamination or habituation to a product (Belk, 1988). Arnould et al. (2005) added that consumption activities are also part of self-concept creation, proposing that Belk’s succinct “we are what we have” (p:139) was outdated. They argued that not just goods on their own could become part of our extended self, but also intangible things or the consumption practices themselves (Arnould et al. 2005).

Belk (2007) stated that there is a trend toward less possessiveness and materialism, and our society is becoming an economy based more on experience, which values more “doing”

over more “having”. By using car-sharing cooperatives as an example, Belk (2007) argued that people could similarly leverage their lifestyles by either belonging to an automobile cooperative or owning a private car. That means we can share something without losing it.

Thus, he opened the debate on “why owning when you can share” (p: 727).

Finally, Belk (2014) argued that the sharing economy and patterns of collaborative consumption are concepts born during the Internet era, which are still growing today. Those trends have given rise to new business models and consumption practices like co-creation, PSS, online-volunteering, access-based consumption, etc. They also challenge the traditional approaches to doing business, as enabling consumers to access a product or service without actually owning it may still influence the consumer’s sense of self. Thus, we might be starting the “post-ownership” economy in which the quote “you are what you own”

(Belk, 1988; p:139) has converted to “you are what you can access” (Belk, 2014; p:1595).

The current study is informed by the self-identity construction theories discussed above as well as their relation to new access-based consumption experiences.

3.2. Marketplace Cultures: The Feeling of Community.

In 2005 Arnould and Thompson argue that “Research into marketplace cultures focuses on understanding how consumers ‘forge feelings of social solidarity and create distinctive, fragmentary, self-selected, and sometimes transient cultural worlds through the pursuit of common consumption interests” (Arnould & Thompson 2005; p. 873). This definition

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contains two key points. The first relates to consumption as a social and cultural process;

and the second relates to the “mean” of consumption and its value of linking consumers with shared interests (Arnould & Thomson, 2018). The object of consumption is not the primary and only aspect consumers value. Instead, there are social interactions and relations with other individuals which help to provide experiences that become valuable to people (Arnould

& Thomson, 2018).

Using the CCT approach, we can define marketplace cultures as sites where people create collective experiences. According to Arnould and Thomson (2018), the symbolic construction of shared experiences provides people with hedonic and emotional benefits.

That means that consumers can transform the meanings of commercial brands into purposes that foster their identity or community projects through consumption.

Concerning marketplaces cultures, Cova (1997) developed the concept of “linking value”

and argued that the traditional economic value of consumption in which consumers extracted the utility of products in exchange for money is outdated. Instead, the concept of linking value operates so “the value of products lies in their ability to deliver socially meaningful experiences, to create communitas and sociality” (Arnould & Thomson, 2018; p.

129). There is, therefore, a need for the consumer to experience community links, memberships, feelings of belonging and “we-ness” value instead of just functional benefits associated with consumption. Therefore, in order to add value, create loyalty and bring meaning to their consumers’ lives, companies should develop product, services or brands that create and maintain this collective sense (Arnould & Thomson, 2018).

4. Methodology

In this chapter, the methodology of the research will be explained, starting from the philosophy of scientific approach which has been followed in developing the study. After that, the research strategy and design, the data collection techniques and analysis procedures used will be described.

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In every research project, the central aim is to develop and expand on our understanding and knowledge of a particular field. When researchers find gaps in the science or come across problems that need to be solved, they formulate questions or hypotheses that need to be answered. After that, they gather knowledge through different methods and techniques that help them to get answers to their research questions. Saunders, Lewis and Thornhill (2016) designed a “research onion” (See Figure 4) that can be used to help to understand the different branches of philosophy which guide research, as well as the different approaches to the theory development, methodologies, strategies, time horizons and techniques that characterises each of these branches. These authors argued that every layer has to be taken into consideration when developing the research, starting from the philosophy of science and getting to the core of the onion in which they decide which data collection methods are most appropriate and should be used.

Fig. 4 – Research Onion4

4 Saunders et al. (2016)

Millennials’ Perceived Values towards Access

MASTER’S THESIS